Todd Bennett owns a successful construction company in Midland, Mich., and he has decided to create some wetlands. This might sound like a fine thing to do, of course, but his efforts have been frustrated repeatedly by the Michigan Department of Environmental Quality and the U.S. Environmental Protection Agency. Ironically, the very agencies charged with improving the environment in Michigan have become obstacles to better environmental policy – a story that is not unique.

Mr. Bennett has been attempting to start "a wetland mitigation bank," an area that is managed specifically for maintaining wetlands in perpetuity. The owner of an approved wetland bank can receive state certified "credits" that he can then sell to developers or landowners. These people can in turn "cash in" the credits with the DEQ to obtain permission to fill other wetlands when they build.

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The approach conforms to state and federal law, which allows the filling of wetlands only when even larger wetlands are created to replace those that are destroyed. Wetland mitigation banks make it easier for developers, allowing them to buy "replacement" wetlands that have been built in advance – but they likewise ensure that developers pay a cost for the wetlands they fill by subsidizing the maintenance of the wetland in the bank.

Such wetland banks are precisely what the Michigan Legislature and Governor John Engler envisioned when Public Act 451 was signed into law in 1994. But 10 years later, there have been only three wetland mitigation banks created in Michigan, and none has been established for use by commercial land developers. Even more disturbing, DEQ has approved only 1.76 credits – a tiny fraction of what the legislation intended. In stark contrast, Florida, whose law was the model for Michigan, has approved 38 banks since 1995, totaling more than 103,000 acres.

The DEQ’s foot-dragging has been particularly noticeable in Mr. Bennett’s case. He has been trying for more than three years to establish an 80-acre commercial wetland mitigation bank in Larkin Township, and he has spent a considerable sum of money trying to get state and federal approval to offer registered credits for the bank he is creating on his property. He has even hired an environmental consulting firm that specializes in wetland mitigation, and his wetland experts have painstakingly answered all of the DEQ and EPA’s questions and objections.

Mr. Bennett, shaking his head in frustration, explains how a "Catch-22" exists: "The DEQ tells me even after my mitigation bank is completed, they might not certify my [ability to sell] wetland credits, but might at the same time say I can no longer develop my land because it has become regulated wetland."

Mr. Bennett no longer believes the DEQ is acting in good faith. "The DEQ does not want to see commercial wetland banks created," he says. "They are afraid that if wetland mitigation banks exist, it will make it easier for developers to construct projects. … [They] are disregarding the intent of the Legislature."

If so, the DEQ is itself being environmentally destructive. If landowners can’t build by buying credits from wetland mitigation banks, they will simply create small wetlands on their own parcels to offset the wetland they fill. Unfortunately, this procedure is seldom effective in creating a biologically functioning wetland. A federally funded study conducted by DEQ and completed in 2001 showed that of the 159 sites inspected with such "onsite" mitigation, only 22 percent were considered successful. Moreover, the successful mitigation projects were generally small in size – roughly one to five acres – making them less effective ecosystems.

It is time for the Michigan Legislature to intervene and modify the existing wetland mitigation banking law to insure that the original intent of the law is carried out. The DEQ’s administrative rules on wetland mitigation banking are too complex and give the MDEQ too much discretion in approving credits for wetland mitigation banks.

The Legislature and Governor Granholm should therefore rescind the rules and amend the statute to specify the criteria that must be met for the creation of a wetland mitigation bank. When an applicant meets those criteria, the law should require the DEQ to approve the credits, thereby encouraging the EPA to sign off, too. Anything less will simply leave Michigan an economic backwater, with fewer successful wetlands.